Thank goodness that is over with; September and the historically weaker returns associated with Q3 are complete! The period that just ended did very much live up to its historical performance, disrupting certain other quantitative data sets/studies along the way. It has proven quite remarkable just how seasonally obedient the market has performed in 2023,…...
On markets, not much has changed since our August Rasputin piece. While most leading indicators point to weaker US growth by Q1, the expected decline is modest as potential recessions go. Tighter Fed policy is partially offset by large fiscal deficits, US industrial policy (incentive-driven spending on infrastructure, energy and semiconductors), strong corporate and household…...
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In my conversations over the years with retail investors — many of whom are novices (not that there’s anything wrong with that) — most don’t swap their long positions for short positions when they turn bearish. Rather, they tend to embrace more of a risk-on versus risk-off approach. ~Sam Ro If you would like to…...
Key takeaways Soft landing (47% Bearish signals vs 58% in Sep-22), but still below-trend outlook; mfg take-off unlikely before easing Slow-but-steady pick up in world EPS to mid-single digit growth in the next 12 months; acceleration in core disinflation Weight of the evidence suggests a mildly positive narrative going into the year-end; higher-for-longer bond yields…...
September is very much living up to its usual swooning of price action, and finding investors recoiling. The seasonality surrounding September (say that 10 times fast), regardless of its consistency and seemingly adherence to a pre-defined schedule, will still induce investor fear. Additionally, there’s no shortage of macro-issues to correlate with September’s price action. We…...
Let’s begin with a mea culpa. In my note of 18 May 2023, I wrote that the risk/reward for equities versus bonds was in favor of the latter. Since then, US equities are up 8%. US long-end government bonds are down 8%. There used to be a word for that. Ah yes. Wrong! ‘The horse is…...
A “soft landing” for the economy in the US seems increasingly possible, so we look back at previous similar episodes to get an idea of what might be ahead for equities there. Despite the Fed’s aggressive tightening cycle over the past year and a half, it looks increasingly likely that the US economy will avoid recession,…...
The explosion of interest in artificial intelligence this year has fueled a major rally in technology stocks, with a concentrated group of large US companies leading the market higher. This slate of “early winners,” including makers of semiconductors needed to build AI technology and cloud service providers with the computing infrastructure to commercialize it, returned roughly 60%…...
Let’s not blow things out of proportion, as the first full trading week of September and month-to-date returns are already off too a poor start. We have always known that this particular August – September period would prove treacherous for investors, and thus far it has born out the historic pattern that we had formerly…...
